Middle East smartphone sales surge by 20 per cent in second quarter

Smartphone shipments in the Middle East, excluding Turkey, reached 11.5 million units in the second quarter of 2024, marking a robust 20 per cent year-on-year increase, according to industry analysts Canalys.

The company noted that this substantial growth is attributed to the region’s economic stability and supportive government policies that have bolstered consumer demand for smartphones.

Moreover, continued strategic investments and economic diversification are expected to sustain this momentum, compelling vendors to enhance their market positions in the region.

The company explained that Saudi Arabia’s economic outlook remains strong, with notable expansion in non-oil sectors despite reduced oil revenues.

In Q2 2024, Saudi Arabia’s smartphone market experienced a 13 per cent increase, driven by significant retail and food and beverage sector growth, alongside a boost from the influx of pilgrims during the Hajj season.

The United Arab Emirates saw a substantial 19 per cent growth, largely due to increased retail traffic from international visitors and key initiatives such as Abu Dhabi’s $10 billion investment in tourism infrastructure.

Iraq also reported a notable 22 per cent growth in shipments, though vendor operations may face challenges due to economic hurdles and Central Bank restrictions on US Dollars.

Qatar and Kuwait saw gains of 14 per cent and 17 per cent respectively, spurred by festive spending and easing inflation.

“Samsung and Apple experienced declines in shipments during Q2 2024 but are set for recovery in the latter half of the year. Samsung retained the top position in the region with a 28 per cent market share despite a 5 per cent drop in shipments, supported by the mid-tier Galaxy A series and the premium Galaxy S24,” Canalys Senior Analyst Manish Pravinkumar said.

“Samsung’s shipments are anticipated to rise in the second half of the year due to aggressive retail strategies and strategic pricing. Although the newly launched Z Fold series has not yet met expectations, the demand for the S24 series remains strong. Apple held a 10 per cent market share, with the iPhone 13 and 14 meeting the region’s demand for iOS devices in Q2. Anticipated new iPhone models are expected to boost demand further among the region’s affluent consumers,” he added.

Pravinkumar also said that “Xiaomi surged to second place with a remarkable 70 per cent growth, driven by competitively priced models such as the Redmi A3, 13C, and 13 4G”.

However, he pointed out that its average selling price fell by 14 per cent due to a focus on the sub-$200 segment.

In addition, TRANSSION, which saw a 3 per cent growth, claimed third place by leveraging aggressive pricing and mass-market appeal.

Nearly 49 per cent of TRANSSION’s volume came from its Infinix brand, while TECNO’s recent regional partnership with Lulu Hypermarkets is yet to significantly impact shipments but is expected to support growth in Saudi Arabia.

Meanwhile, HONOR experienced considerable growth due to increased retail presence in Saudi Arabia and Iraq.

He also noted that Motorola also saw robust shipment growth for its Edge series, supported by expanded distribution across key channels.

“Emerging brands are progressively narrowing the market share gap with leading players, reshaping the competitive landscape in the region,” Pravinkumar said.

“Short-term success for emerging brands,” he continued, “will depend on leveraging the favourable economic climate by enhancing local operations, expanding retail presence, optimising product portfolios, and focusing on profitability while maintaining channel confidence.”

“Established brands should concentrate on innovating with Generative AI, broadening their ecosystems, and integrating sustainability practices to boost customer loyalty,” he added.

The analyst also said that “long-term success will require adaptability to shifting consumer behaviours driven by the growing expat population, influenced by the region’s strategic location, tax advantages, and economic diversification plans”.

“Brands must remain flexible in their product offerings and channel strategies, with partnerships playing a crucial role in ensuring long-term success,” Pravinkumar concluded.